Mortgage Points Calculator

Should you pay discount points to lower your interest rate?

What is this? Each mortgage discount point costs 1% of your loan and typically lowers your rate by 0.25%. This calculator shows whether paying points saves you money — and how long it takes to break even on the upfront cost.

Key insight: If you plan to stay in the home less than the break-even period, skip the points. If you'll be there 10+ years, points usually pay off.

Who it's for: Home buyers deciding between different lender offers with different point structures.
Loan Details
Decision Analysis
Points Cost
—
upfront cost
Rate With Points
—
new interest rate
Monthly Savings
—
vs. no points
Break-Even Period
—
months to recoup cost
Total Interest Saved
—
over loan life
Verdict
—
—

Estimates only. Consult a mortgage lender for actual rate quotes with and without points.

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We may earn a commission if you click above. Calculator is free to use.

Frequently Asked Questions

What are mortgage points?

Points (or discount points) are upfront fees paid to reduce your interest rate. 1 point = 1% of loan amount = roughly 0.25% rate reduction. Paying points makes sense if you plan to stay in the home long enough to recoup the upfront cost.

How long to break even on mortgage points?

Break-even = upfront cost of points / monthly savings. If points cost $3,000 and save $60/month, break-even is 50 months (~4 years). If you'll sell before then, don't pay points.

Should I buy points or make a larger down payment?

Compare the effective rate of the points versus the rate you'd get with a larger down payment. Generally, if you can put 20%+ down, skip points. If you have extra cash and plan to stay 5+ years, points can be smarter than a larger down payment.